The Stairstep Breakout System (SSBO).
Having thousands of fans around the world, the strategy can without exaggeration be called a classic. Unlike other systems, when we wait until the market something will happen, but here we are instead waiting for a lull, and only then proceed to action. Another interesting point — over the years, the strategy no one complained about its inefficiency.
Remarkably, the rules strategy has not changed even after many years. Indeed, it often happens that the original rules vary greatly, are complicated, resulting in lost the very basis of the approach. Here the rules are not changed, the only was designed by an auxiliary indicator to simplify routine processes on the part of the trader.
Features TS
Platform: MetaTrader 4
Currency pairs: any
Timeframe: M15-D1
Trading time: around the clock
So we know that the market trends are, which is dedicated to capture most of the trading systems. And also in the market there are periods of calm, when nothing happens. We all know them are one of the most dangerous periods for the trader, as it is here formed the largest number of false signals. In this strategy we have been looking for these times when nothing happens, that is formed consolidation zone.
A lull formed in the period of the interim agreement in price between buyers and sellers of truce between bulls and bears. But, as the war never ends, and sooner or later one side wins, that will result in some movement. During this “truce” we can enter the market and follow the trend established against him, either wait which side will win.
The point is that consolidation sooner or later lead to a strong surge and it is our task to catch.
As you probably already guessed, the first thing we do is waiting for the formation of those areas of consolidation. It is worth considering the shape of the formed area. Than the already long and the area of consolidation, the stronger the out of it, that we are, indeed, interested. For example, for M15 the length should be between 20 bars and more for H1 can be enough and 10. Normal height for the consolidation of approximately two average candles.
If you trade via MT4, to mark the consolidation area on the chart via the menu item Insert – Shapes – Rectangle. At first, if you are not sure, there is a zone of consolidation or not, it is better to skip the entrance and wait for a more correct formation. In the attached file there is a pdf document from the author of the strategy (consolidations.pdf), where you will find examples of consolidations in the various States of the market.
Those who are already familiar with graphical analysis, the consolidation area will often recall familiar patterns, like tapering flag, triangle and so on. But in this strategy we figure the do not consider. In any case, the method of determining the areas of consolidation can be very subjective, which is why for this case it is better to use the auxiliary indicator.
The Dynamic Breakout Box indicator automatically determines the consolidation area corresponding to the specified parameters. Rendering the consolidation area continues into the future to figure out how price will react to it. On the chart we see that price actually remembers these levels and periodically testing them.
Version of the indicator, the Final Edition in addition to these areas of consolidation also builds statistics of possible inputs/outputs. For example, here we see that over the past 50 days (the period can be specified in parameters) was made 30 31 long and short trades, and in General terms, was earned 402 points.